Siemens takes i2 as e-partner

Mike Simons

Siemens, the German electronics and manufacturing conglomerate, has signed i2 as its strategic partner in one of the...

Mike Simons

Siemens, the German electronics and manufacturing conglomerate, has signed i2 as its strategic partner in one of the world's largest e-business initiatives.

"We have established the largest electronic building site in the world and intend to transform ourselves into an e-driven company in record time," said company president and chief executive officer Heinrich V Pierer.

"All processes will run electronically - from procurement to marketing, from development to control," he added.

This will be a substantial task for a company with 440,000 employees in 190 countries.

The company will use i2's software to manage its global supply chain and to standardise all its related customer and supplier processes.

Siemens, which claims a global presence second only to Coca-Cola, has created a central fund of 1bn euros (£590m) to drive the change forward, with the company's disparate divisions expected to provide further funds.

The company hopes to recoup this central investment, in the first 18 months of its e-business transformation and aims to save 3% to 5% of its 70bn euro net sales when the system is fully implemented.

The e-business strategy will be driven from centres of e-excellence, in Munich, Atlanta and Singapore. These sites will be the central platform for all the company's e-business activities.

Siemens Business Services, with IBM, will manage the transformation using i2's Trade Matrix platform and suite of e-business solutions for design, buy, plan, sell, fulfil and service. In addition, Siemens will use i2 content management and consulting services. The company said i2's architecture would allow it to integrate with Siemens existing technology, including 360 SAP enterprise resource planning (ERP) systems - one of the world's biggest SAP installations.

Simon Bragg, senior analyst at consultants ARC, said, "This is a major blow for One and SAP's failing supply chain planning solution. Siemens is a major SAP user, and it is significant that such a major German company has not used Commerce One to e-enable its design, buy, plan, sell, fulfil, and service processes."

Siemens already has implemented i2 on top of SAP in its PC division. "This was one of i2's more difficult implementations, partly due to the difficulty of integrating with SAP R/3," said Bragg.

Siemens told Computer Weekly, "SAP will remain a strong partner of ours." Meanwhile i2 said it was neutral over SAP. "We do not do ERP and we have to integrate our products with our clients legacy systems," a representative told Computer Weekly.

Siemens is currently negotiating with CommerceOne and IBM on the provisions of additional systems.

Siemens' e-transformation goals

  • Reduce spend on materials

  • Reduce inventories

  • Improve product development and quality

  • Improve buying and selling efficiency

  • Increase e-procurement from 10% to 50% of purchasing

  • Web enables all 440,000 employees within 12 months

  • Develop a global knowledge database

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